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Underinsurance Explained

Why You Should Avoid It!

Published on Tuesday, 09 July 2013
by Ann Moylan

We know that everyone is looking to make savings and reduce costs at the moment, but it's really important to make sure that in these recessionary times you don't underinsure your home. For those unfamiliar with the term, underinsurance is when your insurance policy does not adequately cover the cost to replace your property and personal belongings.

You may have seen the Independent recently published an article urging people to resist the temptation to underinsure their property as it can cause big problems at claim time - and we would echo that sentiment.

People often underinsure for two reasons; to either reduce the cost of their premium or because they're unaware of the true value of their home and its contents. When searching for home insurance cost will naturally be a big factor, but it should not be the only one. There's nothing worse than hearing about someone who has taken out cover, only to discover at claim time they're underinsured. That's why it's really important that you get the right level of cover to begin with.

If you're on the lookout for cover we recommend that you take the time to sit down and make a list of all your possessions. Furniture, white goods, jewellery, computers, TVs, clothes, pots and pans. Include everything. Just think what would happen if you suddenly lost all of your possessions? How would you cope? It's easy to underestimate both the value and number of possessions you have, but it's really important to make sure that you have an adequate level of cover, otherwise you could find yourself out of pocket.